...Airline industry Indian Airline Industry Management Economics P a ge |1 Airline industry A Project report on INDIAN AIRLINE INDUSTRY Submitted on 13Oct2012 in partial fulfillment for the requirement of the subject "Managerial Economics” during academic course of PGDM-Executive 2012-13. Submitted by Abhas Desai(06) Bharat Dalvi (05) Nitin Palve (19) Prasad Babu (10) Arjun Singh (04) Ravi Sastry (22) Vivek Misra (16) Guide: Prof. J Bhargavi K.J.Somaiya Institute of Management studies and research Mumbai Management Economics P a ge |2 Airline industry Industry Outlook: Global Positioning Airlines Industry analysis : Management Economics P a ge |3 Airline industry • • • • Economic growth environment is weak Industry profitability not perfectly but closely correlated High fuel price no problem when growth is strong But growth now close to point where profit turns to loss Management Economics P a ge |4 Airline industry • • • • Price of jet fuel persistently high In 2008 spiked higher but just 7 months Jet fuel price >$120/b for past 15 months Even after recent fall still higher than early 2011 Given difficult environment cash flow performance to date good at around 10% of revenues, except Europe (1/2 that) Financial market signal more or less consistent with change in cash flows since 2009 Management Economics P a ge |5 Airline industry • • • Demand for air travel expanding well above trend...
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...“CARTELS IN AVIATION INDUSTRY” (Report submitted on July 12, 2011) SUBMITTED TO: COMPETITION COMMISSION OF INDIA BY: PREETI MECHAN Vth YEAR GUJARAT NATIONAL LAW UNIVERSITY Email: preeti.mechan@gmail.com 1 DISCLAIMER This project report/dissertation has been prepared by the author as an intern under the Internship Programme of the Competition Commission of India for academic purposes only. The views expressed in the report are personal to the intern and do not necessarily reflect the view of the Commission or any of its staff or personnel and do not bind the Commission in any manner. This report is the intellectual property of the Competition Commission of India and the same or any part thereof may not be used in any manner whatsoever, without express permission of the Competition Commission of India in writing. 2 TABLE OF CONTENTS I. II. III. IV. Acknowledgement.........................................................................................4 Objective........................................................................................................5 Research Methodology.................................................................................5 Chapter I Introduction...................................................................................................6 V. Chapter II Aviation Industry in India............................................................................7 History of Aviation Industry in India.............
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...did the concept of LCC emerge in India? Which factors encouraged the growth of LCCs? Aviation industry in India was born in the year 1930.Tata group one of the prominent industry in India launched Tata airlines (India’s first airline services) After the emergence of the airline industry in India, after two decades more eight private players started their business but their operations were quite restricted. These airlines proved to be a failure despite constant support from the government. As a result Air traffic enquiry committee was formed constituted by government of India recommended the nationalization of airlines. The air corporations Act 1953 was formulated and the two entities were nationalized namely Indian airlines corporation (IA) and Air India International (AI). The act restricted private players until 1986. In 1990’s private sector was allowed to reenter the market with the wave of the economic liberalization. This was the time when LCC concept in India was brought into picture in the Indian market. By March 1994 the government had approved six private carriers to commence the domestic services. But despite two carriers all others closed and filed insolvency. This duopoly continued till 2003, this duopoly was challenged by air Deccan in 2003 with its concept of LCC which made this industry emerge in India which proved to be a turning point in this industry. Air Deccan with its entry brought into picture special discounts, promotional fares, check fares...
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...Issues Aviation supports 1.7 million Indian jobs and contributes 0.5% of India's GDP. And that is just the beginning. It could do much more. Connectivity is the backbone of today's global economy--bringing people to business, tourists to vacation destinations and products to markets. All are important to India's development. On an average, Indians travel by plane once in ten years, while Americans travel 1.8 times each year. If Indians travelled as frequently as Americans, the market would be 2.1 billion travelers instead of today's 120 million. But instead of flourishing and delivering economic benefits, India's aviation industry is struggling. The twin shocks of skyrocketing oil prices followed by the global financial crisis hit in 2008-just as India was gearing up for high speed aviation growth. Four years later, the sector's recovery is hampered by high taxes, insufficient infrastructure, high costs and restrictive investment policies. AAI against Kolkata, Chennai airport privatisation Airports Authority of India (AAI) is opposed to the government's proposal of privatising the Kolkata and Chennai airports, its highest revenue earners, arguing that it is well equipped to manage the facilities, and such decisions can merely undermine the public sector. Criticising Planning Commission's logic that slow commercial decision-making at AAI was the reason for privatisation of these two airports, senior officials at the PSU expressed fear about the state-owned company's...
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...POSITION PAPER ON THE AIRPORTS SECTOR IN INDIA May 2009 Department of Economic Affairs Ministry of Finance Government of India AIRPORTS SECTOR EXISTING SCENARIO 1. The civil aviation traffic has seen an unprecedented traffic in the past few years on account of booming Indian economy, growing tourism industry, entry of low cost carriers in the private sector, liberalization of international bi-lateral agreements and liberalization of civil aviation policy. In future also the civil aviation traffic is expected to grow at the same pace despite current slowdown due to global recession. But airport infrastructure has not kept pace with the growth of the civil aviation traffic. This has resulted in congestion and inefficient services in major airports, limited landing slots, inadequate parking bays and congestion during peak hours for airlines. Development of quality infrastructure will have an impact on international competitiveness and economic growth. This requires faster development of civil aviation infrastructure on public private partnership mode. In tune with the requirement many initiatives have already been started in the 10th five year plan and they are expected to continue in the 11th plan also. 2. Of a total number of 454 airports and airstrips in India, 16 are designated as international airports. The Airports Authority of India (AAI) owns and operates 97 airports. A recent report by Centre for Asia Pacific Aviation (CAPA) states that over the next 12 years...
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...natural calamities like floods, earthquakes, famines, epidemics, hostility and collapse of law and order. The beginning of the air transport was made in 1911 with a 10 km air mail service between Allahabad and Naini. The real progress was achieved in 1920 when some aerodromes were constructed and the Tata Sons Ltd. started operating internal air services (1922). Flying clubs were opened in Delhi, Karachi, Calcutta (now Kolkata) and Bombay (now Mumbai) in 1928. In 1933 another company Indian National Airways was constituted to serve between Karachi and Lahore. In 1938 .the Empire Air Mail Service was introduced to carry mail between the empire countries. In 1946, the Government set up the Air transport Licensing Board which granted 11 licenses. At the time of Independence 4 companies were operating their air services (Tata Sons Ltd., Indian National Airways, Air Services of India and Deccan Airways). By 1951 there were 4 new entrants: (Bharat Airways, Himalayan Aviation Ltd., Airways India, and Kalinga Airlines). Airports India has international airports besides 87 aerodromes divided into major, intermediate and minor categories. Its 5 major international airports are: Mumbai (Santa Cruz), Kolkata (Dum Dum), Delhi " (Palam), Chennai (Meenambakkam) and Thiruvananthapuram. The operation, management, planning and development of these airports are the responsibility of the International Airports Authority of India. These airports lie on the International Air routes and are used by Air India...
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...1987 SC1515 (2,3,10) RF 1987 SC2354 (11) ACT: Constitution of India 1950, Articles 14 and 16, Air India Employees Service Regulations, Regulations 46 and 47, Indian Airline Service Regulation, Regulation 12. Different conditions of service of Air Hostesses employed by Air India in India and United Kingdom-Validity of. Conditions of service-Discrimination-Determination of question. Indian Kanoon - http://indiankanoon.org/doc/1903603/ 1 Air India Etc. Etc vs Nergesh Meerza & Ors. Etc. Etc on 28 August, 1981 Retirement of Air Hostesses in the event of marriage taking place within four years of service-Whether unreasonable or arbitrary. Retirement of Air Hostess-Provision in service rule, or on first pregnancy whichever occurs earlier-Whether unconstitutional. Retirement age of Air Hostess-Fixation of at 45 instead of 58-Whether in valid . Air Hostess-Extension of service-option conferred on Managing Director- Whether excessive delegation of power. Air India Corporations Act 1953, S. 3-Air India International and Indian Air Lines-Whether separate and distinct entities. Indian Evidence Act 1872, S. 115-Estoppel against law- Whether permissible. HEADNOTE: By virtue of section 3 of the Air Corporation Act, 1953 the Central Government created two corporations known as Air India International and Indian Air Lines. A.I. Operating international...
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...STUDY OF THE SCENARIO OF INDIAN AVIATION INDUSTRY IN A SPAN OF FIVE YEARS AND THE RISE AND FALL OF KINGFISHER AIRLINES IN THOSE YEARS. Indian Aviation Industry It is one of the fastest Growing Aviation Market. There are approximately one billion people and 0.05% of them fly. More and more middle class families now prefer air transport than other traditional mode of transport. The Indian travel market has nearly tripled to $ 51 billion by 2011, from $16.3 billion in 2005-06. Origin of Indian civil aviation industry India occupies an eminent position in the civil aviation sector with a large fleet of aircrafts. Estimates show that the domestic and international passenger traffic in India is growing tremendously PEST ANALYSIS – AIRLINE INDUSTRY Political Factors India’s political environment – Tension with Pakistan, Government’s inability to control issues (riots etc) September 11 th - huge drop in air traffic due to safety and security concerns Trade relations with other countries have to be good Economic Factors Recession- airlines are considered as a luxury High operation costs due to low demand resulted in laying off employees Social Factors People from varied income groups have to be catered Destination, kinds of food served have to be chosen carefully Technological Factors Use of Internet- online ticket booking, updated flight information & handling of customer complaints restructuring the existing airports to world class appeal ...
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...agreements, which liberalize the rules and regulations on international aviation’. It includes regulation relate to international airline market, and make able to reduce control by government. This regulation has a relationship with various factors, which includes both of both of travelers and freights, of airline industry (USlegal,2013). Nowadays, many countries joined to this regulation, such as EU and ASEAN. India joined to this regulation without exception. September 2012, the Indian government announced that they designed to give permission to foreign airline industry to corner 49percent of airline industry of India. Therefore, six greatest Indian airlines have loan of combined $13billion, and have been expected to loose combined $1.6billion for this year by Center for Aviation since March 2013. In short, it is consequently difficult to develop their business within India for Indian airline companies, and the loose of the business has to expected. On the other hand, airline industry in other countries hesitate to enter the market, cause they expect they are not able to earn enough profits from Indian due to their low incomes (The Economist,2013). Therefore, it can be an opportunity to develop Indian airline industry even within the regulation. 1.1.2 Economic factors Nowadays, the increasing cost of fuel can been seen in airline industry in every countries. In India, the Aviation Turbine Fuel, ATF, increased 22percent from last July to September. Therefore, for...
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...IMAGE MAKEOVER AT INDIAN AIRLINES The Indian Aviation industry is the fastest growing market in the world after China and Japan. Until the liberalization in the early 90’s, the Indian Civil aviation Industry was controlled by the government of India. In the mid 90’s, the airline Industry opened up with the entry of new private carriers. Industry figures indicate the domestic passenger segment growth to be at 12% P a. and growth for international segment at 7%. A report from the Ministry of Civil aviation estimates that by the year 2010, 25 to 40 million international passengers will fly through Indian airports, while around 45 to 70 million passengers will be flying in the domestic front. At present, the market leader, “Jet airways” along with “Air sahara” controls 46% of the Market share, while “Indian”controls 25%. “Air Deccan controls 13% and Spice jet 6% with Kingfisher having 8% share. Indian Airlines commenced operations in the year 1953, with an initial capital of Rs.3.25 Crores, under the Air Corporation Act. It was formed by nationalizing and merging a group of eight airlines. The Airline was primarily interested with the task of serving the domestic sector and neighbouring countries. Over the years, combined with Air India, it had a near total monopoly over the Indian Skies. On December 7, 2005, Indian Airlines went in for a name Change and has dropped the word “Airlines”. It is now known as “Indian” and has also come...
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...Strategic Management: Porter Analysis for Civil Aviation Industry Ajay Kr. Dhamija¤(N-1/MBA PT 2006-09) Abstract "The air transportation system has become essential to the economic progress for the citizens and businesses of this nation" The airline industry must: ² Be e±cient and technologically superior ² Have the ¯nancial strength to respond to rapid change and opportunity. ² E±ciently move people, products and services to markets, wherever they exist Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid °eet expansion, and intense price competition among the players. But one of the major challenges facing Indian aviation industry is infrastructure constraint. Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid °eet expansion, and intense price competition among the players. But one of the major challenges facing Indian aviation industry is infrastructure constraint. We present here the porter ¯ve force analysis of Civil Aviation Industry and hance try to ¯nd out whether it would be advantageous to enter into this industry or not. Keywords: Porter Analysis, Airline Industry , Available Seat Mile, Revenue Passenger Mile , Revenue per Available Seat Mile , Air Tra±c Liability , Load Factor , Threat of New Entrants , Bargaining...
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...BCCA’S INSTITUTE OF MANAGEMENT STUDIES Nesbit Road, MAZAGAON, MUMBAI – 10 V SEMESTER :______________________________________ NAME OF STUDENT : CLASS : T.Y.B.M.S DIV : 000 SUBJECT : 0000000000 TOPIC : RISE & FALL IN THE AVIATION INDUSTRY NAME OF PROFESSOR : 000000000 ____________________________ _____________________________ SIGNATURE OF STUDENT SIGNATURE OF PROFFESSOR ________________________ _______________________ MAX. MARKS OBT. MARKS ABSTRACT OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO...
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...The term Business Environment is composed of two words ‘Business’ and ‘Environment’. In simple terms, the state in which a person remains busy is known as Business. The word Business in its economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits. On the other hand, the word ‘Environment’ refers to the aspects of surroundings. Therefore, Business Environment may be defined as a set of conditions – Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization.Business Environment has two components: 1.InternalEnvironment 2. External Environment Internal Environment: It includes 5 Ms i.e. man, material, money, machinery and management, usually within the control of business. Business can make changes in these factors according to the change in the functioning of enterprise. External Environment: Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, Geo-Physical Factors, Political Factors, Socio-Cultural Factors, Demo-Graphical factors etc. It is of two Types: 1.Micro/OperatingEnvironment 2. Macro/General Environment Micro/Operating Environment: The environment which is close to business and affects its capacity to work is known as Micro or Operating Environment. It consists of Suppliers, Customers, Market Intermediaries, Competitors...
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...Write up on Case Study of Air India Airlines Group Members: Anukriti Dave Nitu Thomas Vishwa Patel Air Indian Airlines into trouble 1. Introduction Success of the Airline Industry depends on cordial relationship between the employers and the employees. Inflexibilities in deployment of the workforce, supported by rigidity in labor legislation, have all added to the woes and have now begun to affect employment generation as well. All these changes are believed to have impacted employment and employee relations and therefore, resulted in catastrophic breakdowns in industrial relations across the country. Being held at a time when the business scenario is proving to be a challenge for both employees and employers as businesses come under increasing pressure to keep stakeholders satisfied. These changes have implications both for the organization and the employees. As a consequence the nature of relationship between the employees and the employer is impacted. Industrial disputes are a menace to industry and society. Managing an Airline is unique and challenging, the quality of services of Airline heavily depends on the quality of human resource it deploys. Airline companies must have potential human resource policies that help the organization to attain its goals, enable it to employ the skills and abilities of the workforce efficiently, assist to bring about employees job satisfaction and self-actualization and establishing and maintaining harmonious Employer-Employee Relations...
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...CONSUMER BEHAVIOUR Service Quality Perceptions of Domestic Airline Consumers in India: An Empirical Study SUBMIITED TO: MEENAKSHI HANDA BY: SAHIL MALHOTRA (13) RAHUL KALRA (39) Abstract Pricing and service quality are the key variables that decide the brand equity of each player in the airline industry. Existing literature suggests that measurement and management of service quality is the key for survival of airline companies. This research paper examines the service quality delivered by four major airlines in India on the backdrop of stiff competition in the airline service sector. The process of traveling on a domestic airline was divided into pre-flight, in- flight and post-flight experiences. A survey was conducted to find out the perceived service quality of frequent fliers on each of the four airlines across a series of service performance variables. The airline brands were positioned in a perceptual space, where the perceived service attributes were also mapped. Clear differences emerged among the airlines, with two of them perceived as being similar to each other, and the other two differing in many respects. INTRODUCTION India at present has twelve competing airlines in the domestic market as against a single government owned airline in 1991. According to McKinsey Quarterly (2005), the Indian aircraft market is the world’s second largest commercial aircraft market. On-time performance and service levels have risen dramatically and fares have...
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